T-Mobile customers face wait to get data breach settlement money

The front of T-Mobile's corporate headquarters in Connecticut.
The front of T-Mobile’s corporate headquarters in Connecticut. (Image courtesy T-Mobile US/Deutsche Telekom, Graphic by The Desk)

Customers of wireless phone provider T-Mobile may have to wait several months to find out if they are eligible to receive money from a class action lawsuit concerning a large data breach that occurred last year.

Last month, T-Mobile said it had settled the lawsuit by agreeing to pay $350 million in connection with the data breach, which affected 77 million customers who had personal details compromised as part of the security incident.

The breach was widely publicized after someone attempted to sell a significant amount of the stolen data on Internet forums where personal information is traded for financial value. The hacker was later identified by the Wall Street Journal as John Binns, an American citizen who lives in Turkey.

Binns told the newspaper that he located a server at a Washington state data center that was not properly secured. The server was used by T-Mobile to store customer records and other personal information associated with their wireless phone service.

T-Mobile ultimately confirmed the data breach after being confronted by a Vice News reporter who found online classified ads listing the stolen data for sale. Binns has never been arrested or charged with a crime, but court documents reviewed by The Desk last year showed federal law enforcement authorities have opened an investigation into his alleged activities and have obtained search warrants for several of his online accounts.

Several customers sued T-Mobile in a matter that ultimately achieved class action status. Last month, T-Mobile notified the Securities and Exchange Commission that a settlement had been reached in the case, which covered around 76.6 million current and former customers whose personal information was likely compromised in the data breach.

T-Mobile said it will set aside more than $350 million for the class action settlement, which includes $150 million earmarked for improved security. Class members who suffered documented losses that can be directly linked to the T-Mobile data breach could net as much as $25,000 from the settlement, though most affected customers will likely receive payments somewhere in the range of $25 to $100, depending on where they live.

It could be several weeks before T-Mobile finalizes plans on how to disburse the money to affected current and former customers, and even longer before customers are notified by mail or other avenues that they are eligible. As of Tuesday, no website has been set up with information about the settlement or the class action lawsuit, and it was not clear when one would go online.

The class action lawsuit is T-Mobile Customer Data Security Breach Litigation, case no. 4:21-MD-03019-BCW, in the United States District Court for the Western District of Missouri.